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Lawrence Kudlow
Lawrence Kudlow
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Obama's Class-Warfare, Tax-the-Rich Budget

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If you shake out the Obama budget in terms of bold headlines, it's really a class-warfare, tax-the-rich budget. Layer upon layer of tax hikes are piled on successful investors, small-business owners and corporations.

The capital-gains tax goes from 15 percent to 24 percent (including Obamacare). The dividends tax goes from 15 percent to nearly 40 percent, and that's not including the double tax on corporate profits embodied in dividends and capital gains. The Bush tax cuts for top earners are repealed.

There's the 30 percent Buffett-rule minimum tax on millionaires. The carried-interest tax for private equity, hedge funds and other investment partnerships goes from 15 percent to 39.6 percent. The estate tax jumps to 45 percent. State and local bond interest deductions are severely limited. Oil and gas companies get hit. So do banks. And there's probably more stuff in there I haven't read yet. Paul Ryan's press release calls it a $1.9 trillion tax hike, with $47 trillion in government spending over the next decade and the fourth straight year of trillion-dollar deficits.

Some kind of corporate tax reform may be released in a few weeks. But we don't know much about it. And while it may lower the top rate, it's going to penalize U.S. firms operating abroad by roughly $150 billion in tax hikes. All in all, the Obama budget raises corporate taxes by $350 billion. Just what business does not want or need.

Former Bush economist Keith Hennessey estimates that new proposals would create a ratio of at least 1.2 dollars of tax increases for every dollar cut in spending. Most of the spending cuts would slam Medicare doctors and other health providers.

Unlikely to happen. And there is no overall entitlement reform. Somehow, the Obama budget is being offered as a substitute for the $1.2 trillion in spending cuts from the supercommittee. But the slam down in defense remains a huge problem.

There is no $4 trillion in new deficit savings, because $1.2 trillion was already scored by the supercommittee. Plus, another $1 trillion was already counted as savings from the wind-downs in Afghanistan and Iraq. And $800 billion comes from interest savings, not program cuts.

So maybe there's $1 trillion in spending reduction over 10 years. But as the details trickle out, that's a big maybe. Compare that to $47 trillion of total spending increases and at least $1.5 trillion of tax hikes.

The deficit for the coming year, which is $1.3 trillion, would be 8.5 percent of gross domestic product. More important, budget spending remains at over 24 percent of GDP. Debt held by the public for 2013 would be $12.7 trillion, or 77.4 percent of GDP. In terms of 10-year totals, spending would rise by $47 trillion and deficits by $6.7 trillion.

Really, this is a budget that says we must raise taxes in order to raise spending. It's a 1 percent vs. 99 percent budget. But if these tax hikes ever went through, it would be a 100 percent whack at future economic growth.

Obama chief of staff Jack Lew was wrong yesterday to suggest that a budget passed in the Senate requires 60 votes. By law, budget reconciliation requires only 51 votes. But this budget is dead on arrival. All the Republicans and many of the Democrats are not going to vote for across-the-board tax hikes. That's a good thing.

But the question now is: What happens next? The U.S. is in a heap of fiscal trouble — on the verge of bankruptcy. What are we going to do about it?

To find out more about Lawrence Kudlow and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate web page at www.creators.com.

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Comments

4 Comments | Post Comment
Ever since Obama has come into office his number one goal was to "transform America" with everything from the communist manifesto. He has his whole life from cradle, hopefully to grave (soon) surrounded himself with Marxist influence.

His long-time mentor and father figure in Hawaii, Frank Marshall Davis, was a full-blown, active member of the Communist Party. After coming to Chicago, Obama for years attended the church of the Rev. Jeremiah Wright, an ardent and vocal advocate of Black Liberation Theology, a movement with its roots planted firmly in Marxism.
Obama also had extensively documented contact in Chicago with Bill Ayers and Bernadine Dohrn, former members of the Marxist-influenced Weather Underground, and a self-identified Marxist. Obama launched his campaign trail from the living room of these two communist radicals.

Obama's defenders characterize the above charges as mere “guilt by association.” They contend that his connections with known Marxists do not necessarily imply that he shares their views. They claim we can draw no legitimate conclusions about Obama's own beliefs from the above facts concerning his associations.

This scum of a vermin called the president of the United States is a fraud and must be "eliminated" in whatever means "deemed Possible" at all cost to rid us of becoming like the former Soviet Union. If our founding-fathers suddenly awoke from their graves, the first thing they would do is load their muskets. (Give me back my bullets!!!)
Comment: #1
Posted by: Shuzbuk
Wed Feb 15, 2012 6:44 AM
There's no denying we're in financial trouble and we, the people of the United States will have to accept and pay up. The question is as a people, who can help pay down the debt without the debt bringing them down? The answer is obvious to me. We either pile more on the backs of those who are struggling, the poor, the lower & middle class which is what the GOP plan is. Just heap more and more financial hardships on their backs so what if it breaks them. As Romney stated 'let their homes go into foreclosure and let private investors buy them up, that will improve our economy'. I read that as saying: the hell with them, let the rich get richer. The GOP has no qualms about heaping more and more on our backs. We should pay for their excesses so they don't have to. Or, we can do as President Obama is suggesting, let those who have more and those who profited from this crisis pay more. Oh sure, it'll hurt, but it won't break them. Except maybe from their hedonistic free spending lifestyles (but I doubt it). I listen to all this 'chatter' about who's going to pay and it sounds like so many spoiled children squabbling because they don't want to share their toys not realizing they have more due to more fortunate circumstances. It certainly isn't about hard work. If it were about that, every hard working person throughout the world would be wealthy. Truth is, those who work the hardest are usually the least among us. Of course, the spin these scared and greedy politicians (who are bought and paid for by the wealthiest) are claiming is that Socialism or Marxism will befall the country if the rich have to pay more taxes. It's just another scare tactic. It's their methodology..if we don't fall for logic and give them a free ride and we pay up, they'll put the fear of God or the loss of democracy or our jobs in us. They're betting we won't make them pay up. And have no doubt, they are betting....$10,0000 dollars, anyone?
Comment: #2
Posted by: demecra zydeem
Wed Feb 15, 2012 7:34 AM
Why is it "class warfare" to tax and give breaks to the rich but not class warfare to increase the tax burden and take away breaks that favor the poor/middle class? Our debt has to be paid down but any thinking person can see the economic balance is skewered to favor the rich and wealthy with the burden to pay for their excesses placed on those who can least afford it. Imposing austerity measures (the rich play, the poor pay) on a people who can least afford it, who bought into the lie of taking away pension plans and buying a retirement account and lost all, is just outragous. By the way, that money we lost had to go somewhere when it left our accounts. It didn't just disappear as they'd have us believe, no. It's in the pockets of those who brought the crash down around our heads. President Obama, like him or not, stopped the entire system from toppling down. Could the GOP do a better job? Don't forget the lyrics to the Al Wilson song, "Take me in tender woman" also known as the snake song. Just because a snake says what you want to hear, it's still a snake. It will bite you. If you elect a Republican during these times, better bend over and white knuckle it for they shall surely stick it to us and take an even bigger bite this time. The meek will inherit the earth (read dirt poor), the rich will continue to inherit the wealth.
Comment: #3
Posted by: demecra zydeem
Wed Feb 15, 2012 10:00 AM
Why do republicans think that cutting a dime out of military spending will suddenly leave us helpless and weak. We have the most powerful military in the world, spending more than the next 10 countries combined. We are in no danger of being invaded. We can cut waste out of the military budget and still have a kick-ass military. Its not like we're going to reduce a servicemans pay or not give them bullets. On a seperate note, we should not even consider a budget that spends 1.3 trillion more than we take in. For having no problems killing unborn children, Obama seems to have no problem putting our spending crisis on their shoulders, but thats another issue entirely
Comment: #4
Posted by: Chris McCoy
Thu Feb 16, 2012 11:20 AM
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